While there are signs of an improving economy, including better profits margins for technology companies, the job trend in the technology sector remains grim.
Nearly 750,000, close to 13 percent of all high-tech jobs in the United States have been lost over the past two years, according to data today released by the American Electronics Association (AEA).
While the losses are slowing, the statistics tell another story. The U.S. high-tech sector lost close to 540,000 jobs in 2002, and another 234,000 jobs in 2003. In 2001, there were 6.5 million high-tech jobs in the United States. By the end of 2003 that number is expected to be close to 5.76 million.
While many companies have cut positions, either to improve profitability or because of consolidation, there are concerns that many U.S. tech jobs are disappearing permanently. Many U.S. companies are signing IT outsourcing contracts in India, China, Russia and in other countries where there is skilled, inexpensive labor.
Several U.S. states reliant on technology jobs have been particularly hard hit. California lost 123,000 tech jobs in 2002, an 11 percent slip in the total number of tech employees in the state. Texas also lost about the same percentage in 2002 to job cuts, followed by New York, Florida and Massachusetts.
The District of Columbia, Wyoming and Montana were the only three states to add tech jobs between 2001 and 2002, while Colorado led the nation in concentration of high-tech workers in 2002, with 98 high tech jobs per 1,000 private sector jobs, followed by Massachusetts, Virginia, New Mexico and Maryland.
The AEA’s “Cyberstates 2003” reports defines tech jobs as those in the electronics manufacturing, communications services, software and engineering/tech services.
The report goes on to say that high-tech manufacturing employment fell 13 percent, losing 233,000 jobs between 2001 and 2002. Manufacturing job losses between 2001 and 2002 were highest in the electronics components sector with 76,000 lost. Communications equipment lost 47,000 jobs and semiconductor companies shed 41,000 manufacturing jobs. The communications services and software sectors lost 146,000 jobs each, while 15,000 engineering and tech services were shed. On the other side, in 2002, 7,000 research and development and testing labs jobs were added.
On the heels of the AEA report, the Information Technology Association of America, issued a statement aimed at allaying concerns that U.S. tech jobs are increasingly migrating overseas. ITAA said not more than 7 percent to 9 percent of all IT jobs will move out of the United States over the next 10 to 15 years.
While IT spending has risen, it’s not clear when that investment will translate into jobs. The U.S. Department of Commerce said IT spending in September rose 15.4 percent over August, after months of flat spending.
The AEA’s report also detailed U.S. technology exports and venture capital investments, both of which slid in 2002. U.S. high-tech exports dropped 12 percent to $166 billion in 2002 from $188 billion in 2001. High-tech exports constituted 24 percent of all U.S. exports in 2002.
The report added that U.S. high-tech venture capital investments amounted to $13 billion in 2002, a 52 percent drop from the $27 billion invested in 2001.